CAUTION URGED

Sun (Auckland), Volume IV, Issue 1065, 1 September 1930, Page 8

CAUTION URGED

DOUBTFUL SUCCESS OF AIR-MAILS EXPENSIVE TO AUSTRALIA Special to THE Sl'.v WBLLIXGTON’, Today. New Zealand should make thorough inquiry Into the matter of air mails before taking any steps for their establishment in the Dominion, states Mr. B. Soutar, of Wellington, who has just returned from a visit to Au«tralia. Mr. Soutar, who is interested in the question of expediting mails by air, made special investigation of the situation in Australia and declares that the experience of the Federal Government has been anything but reassuring. “Australia has a great advantage over New Zealand inasmuch as she has vast distances to cover which can be spanned only by airplane,” he said today. “In the circumstances one would think that the great saving in time would assure a good return from mail services by air, yet that is not the case. The East-West mail service by air, which was introduced by Mr. Stanley Bruce when he was Prime Minister, involved the Government in a loss of over £31,000 last year, during the first 12 months of its operr tion. and appears to involve it in & least a loss of £25,000 a year for the next four years, that being the period which the Government has set for its contract with West Australian Airways. who are carrying the mails. "The exact figures are these:—The Government pays the company at the rate of 12s Sd a lb for all mail matter carried from Adelaide to Perth and vice versa, but this payment is made on a minimum of 6001 b of mail a trip. That minimum has never been reached and the heaviest mail carried so far has been a long way short of it —1871 b, in all. On the past year's working, the Government has received only £8,020 for postages, and the subsidy has been £39,520.

“The danger to the Government does not end there, however, for should the company carry 8001 b of mail for four successive months, its subsidy would be doubled and it would receive a subsidy at the rate of £79,040 for the remainder of the period of the contract. The Government's surcharge upon this amount of mail matter would be only £34,332, so that its losses would be heavy. On top of these disturbing facts is the further one that the State-subsidised air-mail is being used to take passengers from the State railways with which the airroute is parallel, and the profits on the east-west line last year dropped from £32,000 to £25,000. Of this amount, the whole was not due to the competition of the air-lines, but the fact remains that a good portion of it was to be traced to this source. “Devising a satisfactory subsidy for an untried air-mail line is very difficult, and naturally any company would hold out for the best possible terms. The lesson of Australia’s experience seems to be that New Zealand should be very conservative in assessing the basis of minimum payment to any mail-carrying air-line. Australia thought that she was being careful and setting a fair minimum and yet the biggest mail carried to date has fallen short of one-third of what the Government calculated as a fair estimate. It has been contended by Mr. C. T. P. Ulm and others that lower rates for air-mails would increase their use, but there is not the slightest evidence of this. The airmail, in its present state, caters for a limited demand—a demand of urgency. The telegram and the low telephone tolls are its powerful rivals. In New Zealand, where a matter is really urgent, it is cheaper to telephone than to telegraph, and it appears doubtful whether the air-mail can undermine this business. Even if it did, the result would not be good, for it would lessen one of the best sources of revenue possessed by the Post Office. The thing we must seek is to appeal to those who wish to expedite their letter mail. And in doing that we must go very cannily.”